What really happened when Musk claimed to take Tesla private?

Last month, Elon Musk announced on Twitter that he was considering taking Tesla private for $420 per share and had secured funding. Last week, the US Securities and Exchange Commission outlined a timeline of events leading to Musk’s tweet: January 2017:

Musk began a series of in-person meetings with representatives of a sovereign investment fund. Reuters identified it as Saudi Arabia’s Public Investment Fund. During these meetings, the lead representative of the fund verbally expressed interest in making a large investment in Tesla.

July 31, 2018:

In the first meeting in months, lasting 30-45 minutes, the fund’s lead representative told Musk that the fund had recently bought almost five per cent of Tesla’s stock, expressed interest in taking Tesla private and confirmed that he was empowered to make investment decisions for the fund. The SEC said the meeting lacked discussion of even the most fundamental terms of a proposed going-private transaction.

August 2:

Musk sent an email with the subject, ‘Offer to Take Tesla Private at $420,’ to Tesla’s board, chief financial officer, and general counsel. The SEC said that according to Musk, he had calculated the $420 price per share based on a 20 per cent premium over that day’s closing share price. Musk also picked $420 because he had recently learned about the number’s significance in marijuana culture and thought his girlfriend ‘would find it funny’.

August 3:

In response to Musk’s

email, Tesla’s board had a telephone meeting, where Musk told them he wanted existing investors to stay with the company.

August 6:

Musk discussed a potential going-private transaction with a private-equity fund partner. According to the partner, the transaction structure that Musk was contemplating was “unprecedented”.

August 7:

Musk tweeted around 12:48 Eastern Time, during market hours: “Am considering taking Tesla private at $420. Funding secured.” He did not notify Nasdaq prior to his tweets, as required by the stock exchange’s rules. At this point, the SEC noted, Musk had not made several necessary checks, including not having further discussion with the sovereign fund, providing the board more details, or contacting existing Tesla shareholders. Twelve minutes after Musk’s first tweet, Tesla’s head of investor relations sent a text to Musk’s chiefof-staff asking: “Was this text legit?”

August 10: Musk contacted the sovereign wealth fund for the first time since their July 31 meeting, the SEC said. August 13: Tesla published a blog post attributed to Musk called ‘Update on Taking Tesla Private’. In the post, Musk attempted to walk back on his August 7 tweets. August 24:

Post published on Tesla’s public blog announced that Musk had abandoned the process of attempting to take Tesla private.

September 27:

The United States Securities and Exchange Commission (SEC) filed a lawsuit against Musk for fraud and sought to remove him from Tesla.

September 29:

SEC asks the electric-car maker to find an independent chairman to replace Musk as part of a $40 million deal to settle fraud charges.